Genius Group releases additional details of FatBrain AI transaction

Genius Group released additional details on their recently announced transaction to form an AI-powered Education and Acceleration group to power Sovereign AI ecosystems of tomorrow for entrepreneurs, enterprises, governments and students through AI education and enablement: Deal Structure: The transaction was the purchase of selected FatBrain AI assets and liabilities by Genius Group in an all-share transaction, through the purchase of the stock of a FatBrain subsidiary which is held by Genius as a wholly owned subsidiary, and no merger into Genius has taken place. Post-Transaction Revenue, Profit: Following the transaction, Genius Group’s 2023 pro forma revenue is expected to grow approximately 150%, with 2023 pro forma revenue guidance growing to an estimated $76 million to $80 million. Genius Group’s 2023 pro forma net profit is expected to grow approximately 150%, with 2023 pro forma net profit guidance growing to an estimated $7 million to $9 million. Post-Transaction Balance Sheet: Following the transaction, Genius Group’s 2023 pro forma total assets is expected to grow approximately 40%, with 2023 pro forma total assets guidance growing to an estimated $110 million to $115 million. Genius Group’s 2023 pro forma net profit is expected to grow approximately 50%, with 2023 pro forma total liabilities guidance growing to an estimated $60 million to $65 million. Post-Transaction Structure: The Post-structure leaves Genius Group Ltd as the parent company with the FatBrain assets existing in a wholly owned subsidiary of the parent company, which will continue to trade on NYSE American under the ticker NYSEAmerican:GNS as a Singapore-based company with its consolidated financials compliant with IFRS Standards. Post-Transaction Leadership: Genius Group has an exeuctive executive team and Board of Directors as follows. Peter Ritz, FatBrain’s AI’s CEO, will join the Genius Group Board as Executive Director and Michael Moe, FatBrain AI’s Chairman, will join the Genius Group Board as Non-Executive Chairman. The Current Genius Group of Roger James Hamilton, Suraj Naik and Richard Berman, Eric Pulier and Salim Ismail remain on the Board. The split of the Board is: 2 members FatBrain AI representation. 5 members Genius Group representation. Post-Transaction Ownership: All of FatBrain AI’s former shareholders, which includes investors in the US and accomplished technology and education entrepreneurs and investors, including Michael Moe and Peter Ritz, will receive one Genius Group share for every three FatBrain AI shares. The ownership split immediately subsequent will be approximately 57% owned by Genius Group’s shareholders and 43% owned by FatBrain AI’s shareholders. Approvals: All necessary approvals for the transaction from shareholders, the board and regulators were received prior to the closing. The transaction is not a change of control transaction, and thus the Company believes does not qualify as a significant transaction or merger which would trigger any valuation provisions under any Company agreements. Market Capitalization of FatBrain Ai and Genius Group: Based on our 2023 guidance revenue and post-deal ownership splits of FatBrain AI and Genius Group, together with Genius Group/’s $0.29 per ordinary share closing day price on Wed 13 Mar, 2024 – the closing date of the transaction, this delivers a price / revenue multiple for FatBrain AI’s once their shares are converted to Genius Group’s of approximately a 0.4x price / trailing revenue multiple. Genius Group’s price / trailing revenue multiple by comparison delivers approximately a 0.85x price / revenue multiple. Market Capitalization of Post-Transaction Group vs Industry Peers: The market capitalization based on shares issued post-transactions, delivers a ratio of approximately a 0.65x price / revenue multiple based on the $0.29 closing date price. This compares to the price / revenue multiples of publicly listed Edtech peers: As of their current share prices, Udemy’s price / revenue multiple is 2.73x; Coursera’s ratio is 3.58x; and Duolingo ratio is 17.5x. This gives our publicly traded Edtech peers a range of price / revenue multiples between four times and twenty-seven times Genius Group. We believe this represents a significant, potential upside in our share price as we grow and get closer to a fair value in comparison to our public-listed peers in Edtech. Growth Plan: The plan provides an integrated roadmap and product range to strive to reach the following: launch 100 Genius Cities, impact 100 million customers and students and achieve $1 billion in annual revenues within the next decade, with a shared mission: To build an AI-driven entrepreneur education and acceleration platform, empowering our exponential future.”